US close: Stocks rebound on confidence upswing

US stocks gained ground on Tuesday as better data on services activity and outstanding consumer confidence numbers offset lower oil prices.

The Dow Jones Industrial Average added 133.5 points or 0.7% to close at 18,228.30, while the S&P 500 increased 13.83 or 0.64% to 2,159.93 and the Nasdaq picked up 48.22 points or 0.92% to end at 5,305.71.

This was despite a retreat in crude oil prices after Saudi Arabia played down expectations for a production agreement, calling the OPEC meeting “consultative” and dashing hopes that an agreement will be made.

West Texas Intermediate dropped 3.1% to $44.5 a barrel and Brent crude was down 3.2% to $45.8.

In economic data, Markit’s flash US services purchasing managers’ index printed at 51.9 in September from 51.0 in August, beating expectations for a reading of 51.1. A reading above 50 indicates expansion in the industry.

This marked the fastest monthly rise in activity since April, albeit still relatively modest.

Adjusted for seasonal influences, the flash US Composite PMI Output Index ticked up to 52.0 in September from 51.5 in August.

A gauge US consumer confidence rose in September to a new high. The Conference Board’s consumer confidence index increased to a seasonally adjusted 104.1 in September from an upwardly revised 101.8 in August, beating expectations of 99.0.

Consumer confidence was therefore at its highest level since the 2008 crisis, noted analyst Josh Mahony at IG, which he said highlighted a generally positive feeling within the US as the jobs market improves.

"Contrary to Donald Trump’s pessimistic rhetoric, it turns out that confidence is on the rise, and that surely says a lot about the condition of the US economy right now."

Meanwhile, investors continued to assess the first US presidential debate on Monday. Markets appeared to declare Clinton the winner of the debate as she went on the offensive against Trump, mentioning his controversial comments towards women and attacking the non-release of his tax returns.

Elsewhere on the corporate front, EndoChoice Holdings Inc. shared surged trade after Boston Scientific Corp said it would buy the medical technology company for about $210m.

Kite Pharma rallied after the drugmaker later on Monday released positive test results for its non-Hodgkin lymphoma drug.

After the market closed, Nike released its estimates for quarterly futures orders up 5% to $12.3bn, which was short of forecasts.